Hit by Big Loss, Bird Seeks $300M in New Funds
theinformation.com
theinformation.com
https://www.theinformation.com/articles/hit-by-big-loss-bird...
PS. I'm an Information sub and love how deep you go in the reporting - keep it up, it's very refreshing.
Im an auto mechanic by trade, and realized these things were a terrible idea when we started having to remove them from cars and trucks. Running over one of these things is somewhere between hitting a land mine and a bicycle rack. Ive personally had to cut at least 30 of them from various drive shafts, wheel wells, and suspension arms. I have a Mercedes van customer looking at nearly six thousand in damage to everything from the radiator all the way back to the driveshaft knuckle after hitting two of these at highway speed as they fell out of the back of a pickup truck.
The real joke is they are looking to file an insurance claim against Bird, as their attorney believes state vehicle law covers the scooters as a motor vehicle similar to a motorcycle.
Nobody would leave their own scooter in the street, but people have no problem leaving someone else's scooter wherever it was convenient. People leave them all over the place where I live, and it's been a huge problem. They're constantly being fished out of the rivers, dumpsters, etc.
https://drive.google.com/open?id=19Bl1ZhMvxbLliIyNkNe_Aj3QWD...
I contacted Bird and while they did look at the video and seemed sympathetic, I got the impression that nothing was done in response. That's because they refused to tell me even simple things like "The rider was reprimanded". I didn't ask for the rider's identity, just for what was done in response. And I contacted them within an hour of the incident, providing precise time, location, and the video above, so I'm very confident they knew who the rider was.
(Sorry for the strong language in the video. Note that I included some time before the incident because I know from experience that some people always seem to suggest that if a cyclist had a bad time on the road it was because they antagonized who gave them a bad time. I hope it's clear that I had no contact with this guy before the video.)
Fortunately, I don't see this as much with non-delivery cyclists. In NYC at least, this is mostly a problem with delivery people; the extreme pressure they are under to deliver on time, combined with the fact that many of them have clearly received no safety training, seems to be a major cause.
NYC's bad cyclists (and, in the future, bad scooterists) are actually scarier to me than NYC drivers because they can come at you from so many more angles thanks to their small size; it's much easier to predict and avoid cars and even pedestrians. (People are also used to cyclists here, so the cars are paradoxically not nearly as scary to me as they are in less dense environments.)
[edited to clarify that I was also on a bike]
The small size was a major problem here. I probably would have seen the scooter rider earlier if they were a driver running the red light. I now always check for red light runners at that intersection.
(As for how visible I was, I was wearing a hi-viz jacket at the time. My air horn seems to have been the only thing that caught the scooter guy's attention. Not sure what more I could do.)
1. Bird rider runs a red light. 2. Bird rider has head phones on. 3. Bird rider doesn't bother to look at oncoming traffic before crossing.
It's clear to me from this thread, that scooter riders need insurance and a driver's license. That would solve 90% of the issues right there.
Its doubtful the truck driver was an employee of bird, but its also likely they were only moving the scooters because of this model. That sounds like enough of a reason to add them to the suit that will also likely hit the driver.
The issue is not precisely with Bird, but that the big dogs who fund these companies can produce giant pieces of wasted material thanks to how US and Chinese monetary policy works
You wouldn't blame the automaker for a drinking and driving incident that resulted in a death, you'd blame the driver.
Imagine running over a piano that fell off a truck, and then suing Steiner instead of the moving company.
On top of that, because many of the chargers are “contractors”, you get situations like the OP described where random people just throw scooters in their pickup, unsecured, and then they fly away on the highway.
In any case, yes, drivers are responsible for securing loads, but in a lawsuit you go after the deepest pockets if you think you might be able to get payment. It would be an interesting argument that Bird is liable as the hunter is at least an independent contractor for Bird while picking up & transporting the scooters for charging.
[1]: Apparently this is the term for those who pull the scooters in and charge them and then redeploy them after the fact for a kickback from Bird.
Bring a whole load of scooters into public spaces without ensuring they are properly stored, and professionally collected, is irresponsible and should be illegal. The pavement and roads belong to people, not to corporations.
It's a joke to say anything else. If a scooter can get hit by a car and mess up the car, we've gotta do something about this nuissance! If a scooter takes up 2 sq ft of space on a curb in between rides, they're ruining our streets! Capitalism run amok! But the entire row of cars parked for free a couple feet away? That's great. Not to mention, tens of thousands of lives lost every year? All good, nothing wrong with that.
It's also got absolutely nothing to do with people vs corporations, using that dichotomy here is absurd. Car makers spend hundreds of millions of dollars a year advertising to people to get them to buy more, bigger, more expensive cars. Not to mention, cars are even often leased or rented. I don't see why the business model of rental vs one-time purchase matters, but even if it does matter to you for some reason, cars and scooters are both rented!
Leaving the easy business reasons aside, I was in Denver and the amount of these scooters littered around the city pissed me off. They where everywhere.
It’s just a matter of time before the city has enough and either bans them or just regulates them out of business viability.
This is one of those things that had this business been forced to stand on its own 2 feet with early revenue survival and not been gifted life by investors it would have met its doom naturally without the waste of billions of dollars.
It’s a great example of how the new “start-up” method of business building can be toxic and unproductive to the betterment of society. It allows bad ideas to have life because a few people wanted it to be so. Society would have killed this quickly.
As for the waste, it's not like Bird is funded by people's personal retirement accounts. Nobody invested is getting a fast one pulled on them. The money didn't vanish. The VC goal is to take a massively scalable idea and see if it is possible to find profit in it. This is clearly scalable, so they're testing it out and seeing if they can find a formula. For better or worse, VCs are members of society.
If you spent $2500 on Bird subscriptions and rides then that means that the business model is successful at least in your case.
Your comments directly prove the previous poster's thesis.
EDIT:
And yes, Bird has realized the failure in their previous business model of renting scooters, and will be SELLING scooters directly (which in my opinion is a much better business model)
Alas, "Delivering in US and Europe summer 2019" means that they have lost out on $2500 worth of business from goobynight (and from the market segment represented by goobynight).
Most people don't want to own. It's less useful for bar hopping and you're on the hook for maintenance/repairs/charging/storage. I'm more handy than the average person that rides these. The average person living in downtown Denver likely doesn't even own a set of tools.
A rental business is much more attractive to VCs, if they can make it profitable. Has a niche retailer has ever received VC attention? Honest question. That doesn't feel like it scales like nearly on demand rentals.
less useful for bar hopping and you're on the hook
Rubbish: they can be successful because not everyone wants to buy a scooter. Also commenter still probably uses Bird, for example one way trips or when it is just more convenient.
I've also rented a couple Lyft scooters out of convenience, as you said. They certainly feel worse, now that I'm spoiled, but the convenience of just dropping them off is a huge win.
running errands
You stop for your first errand, come back outside afterward, and bam! someone else took it. What if there are no others nearby?
Funny enough, because in Austin it's the absolute polar opposite. Sentiment there seems to be to fear and litigation. Even worse in Nashville. Southern, car-dependent cities prioritize the private car-owning driver above all other forms of life.
Until the CA pension goes bust due to VCs, I'm still OK with what they do.
This is subjective. I live in a city that has at least five brands of scooters, and I work downtown where they are most densely clustered. (Not only that, it's a popular area with tourists, so it's an eternal September of scooter use.)
Some people here feel exactly the way you do; others think they're great. Some people consider them a nuisance to pedestrians; I walk on the same sidewalks and rarely experience a need to step around or over them. Some people feel terrified and menaced by them; I use the same streets and sidewalks, and for me, scooters barely register next to the danger posed by cars. Some people think they take up an inordinate amount of space; I think you could fit all the scooters in the entire downtown area into half a block's worth of street parking. You think they're toxic and don't improve society; I think they decrease the number of car trips and (in combination with Lyft/Uber) make it affordable for a lot of young people without tech jobs to live in expensive cities by making car ownership less necessary.
Downtown, where pedestrians are more than an afterthought, I see people with physical disabilities using the sidewalks every day. (There's a homeless shelter not far away.) I don't see them having problems with scooters. There's plenty of space.
Honestly, I don't see many fallen scooters at all downtown. Considering how easily they fall over from being jostled (which should improve in future models) I suspect a lot of people care enough to take a second to put a fallen scooter upright. When you think about all the ways people can be shitty with scooters, you have to factor in that people can be pretty nice, too.
Of course people aren't always considerate. In my own neighborhood, sometimes people block the sidewalk with their cars when they don't pull forward far enough forward in their driveways, forcing people in wheelchairs to go into the street. That hasn't caused the world to end, and neither will scooters.
https://www.kxan.com/news/local/austin/driver-arrested-after...
That said, on balance I'd rather have some annoying scooters rather than a whole crapload more cars, streets, parking, etc. And I'm hopeful that over time the culture around scooter usage will improve - particularly since the early users seem to be skew towards drunken barhoppers.
Of course what I really wish is that people would just sack up and ride bikes. Even better for the environment, better for your health, etc. But it's pretty clear that many people will never sign on for that, so something between that and a full-on car is welcome IMHO.
It's tough because people take cars for granted. They aren't ordinarily conscious of how big and dangerous cars are and how far we go out of our way to accommodate them, so it's hard to sell them on the value of mitigating that cost.
If we can replace some of the cars with scooters it should be a net gain for citizens.
The Information willfully printed misleading information here.
https://twitter.com/travisv/status/1149763861731352577
I know of them doing this in a very messed up way at least once before.
They've got a business to run, but they seem to have let their "exclusive", scoop driven brand excuse their crossing of clear, ethical lines.
What is your affiliation here, considering that you created this account an hour ago solely to post this inflammatory and misleading accusation?
You are one pothole or crack in the road from being knocked on your ass under a passing bus. And given the state of our US city roads, this not just a remote possibility. The size of the wheels is just not safe at high speed + you being able to avoid situations like this. Don't even try it at night -- very dangerous.
Ride a bike.
That's not to say there's aren't potholes large enough to take out bikes, just that there are a set of potholes that bikes can ignore and scooters cannot. Nor is the above point that bike's don't have danger associated with them. (Largely, idiots in cars.)
It seems if they can't get their fleet numbers higher, that they risk customers going the buying route, especially when the costs of scooters has gone down over time.
Even with my mild usage, it made more sense to me to own rather than rent. Much to Bird's chagrin (probably) rather than going with the overpriced, under-powered buy your own Bird (https://shop.bird.co/), I've put the deposit down on the Boosted Scooter (https://boostedboards.com/vehicles/scooters/boosted-rev).
The introduction of this level of transport was enough to ditch the car and mix bus/bike/scooter full time.
I doubt the raw number of scooters changed all that much, so it's probably just a density problem as they've spread them throughout the city more.
This is a business? How, exactly, does it get better? The cost and revenue are pretty straightforward here.
Just because Uber found a big enough sucker, the Saudi Arabia sovereign wealth fund, to keep them going, doesn't mean everybody can do it.
https://twitter.com/travisv/status/1149762561807548416
As he puts it:
"It's def a seasonal business and we weren't diversified in the southern hemisphere last year. We will be this year."
Startup founders tend to be notoriously optimistic, but this explanation sounded pretty plausible to me.
The other tweets in this thread also to me are evidence that he has a pretty decent grasp of the economics of his business and has a plan to take it to profitability without relying on assumptions of e.g. self driving robots picking up scooters built from free titanium.
I’m not saying you are wrong, I’m just saying that data you’ve cited is not very helpful.
The only way they can make it more cost beneficial is if they charge less if the rider drops off their scooters at a charging station and higher costs if they just dump the scooter anywhere. But that is more costs for Bird.
Second is if they franchise out the business to "entrepreneurs" that handle things for them and they just concentrate on the app. But that's not a multi-billion dollar business.
There is no path where Bird becomes a viable business that grows into its absurd valuation.
I was recently chided and reproached by the HN mods for knocking scooter companies (even got the old “this isn’t personal, but don’t...”).
the point is with any SV funded company you don’t need revenue or even to be a viable business. You just need SV money (I think Bird has already burned through $415M and now asking for this $300M) to launch the business and “grow” the user base and/or metrics(someone here once fittingly described the model as selling $5 bills for $1).
So now you raise $500M sell $5 bills for $1, the startup staggers their sales so they show constant growth month over month, in reality you raise additional rounds to get more VCs to buy in and help market the company, then finally when you show tremendous growth (metrics), show revenue of $100M, then you file for a IPO and explain away the losses of $400M by saying at any point you can “flip the switch” and cut costs by no longer reinvesting in growth but make profits. Then at IPO you cash out and dump the shit company that’s never made a dollar on the public because all they see is the media pushed by SV/VCs with the media contacts, the big SV investor names, 100% growth month over month metrics, and the hope they to will get rich.
On the contrary, I chided you for posting in the flamewar style (https://news.ycombinator.com/item?id=20347016), which we don't want on HN and which the site guidelines ask you not to do. We don't care about scooter companies, we care about the signal/noise ratio of HN threads.
Sure, there are examples like Blue Apron that seem to fit your narrative, but they are the exception.
If your narrative was correct, hedge funds or other intelligent investors would quickly catch on and short funds that purely track tech IPO's and make a killing. Obviously playing the markets is not this easy.
Can you even explain what that means?
In my estimation the companies are staying private longer so the VCs can blow up the valuations pre IPO higher than anytime in history, whereas, if the startup IPO’d from the start there is no way to continue the growth while sustaining the loss (in the real world business have to make a profit to continue) and VCs couldn’t make the same profit they do now, but in all other respects the risk would be the same.
Anyway it wouldn’t be to hard to look at the IPO of VC backed tech startups and determine what % had profits vs operating losses (obviously my guess is the majority are IPOing at losses). Then, a further analysis could be done to see if the average startup company valuations/market caps declined post IPO and how much pre IPO investors/shareholders took off the table.
Edit: looks like since 2010 there have been 100+ tech unicorns ($1B+ valuation) and ~2/3 didn’t make profit. Wish I could readily calculate how much VCs made taking those companies public, maybe someone can link an article/data.
Bird seems to fit the cynicism just as well as Blue Apron. I'm unclear how the above ever turns into anything viable.
Here's a counterpoint why it might be a viable business: it unlocks a new market. Scooters enable a new class of trips: trips between 0.5 and 2 miles. There's currently not a lot of trips happening in that distance... below that you can walk, above that you take transit, but that coffee shop 1 mile and change away is just enough of a pain in the ass that it's not worth going there. Unless there was something that made it easy to go that distance.
Scooters are a new modality of transport that opens up an entirely new class of trips. Combined with the fact that the population is broadly trending towards dense urban environments, you have a whole new market you've unlocked.
Scooters aren't about replacing Lyft rides -- no one uses a scooter for a full hour -- scooters are about servicing trips that are too short for an lyft.
You need to walk around and find one. And during rush hour, it won't be at the Caltrain station because they're already taken and distributed around the city.
It's clear as day that there's no way this is going to work at scale in order to justify a multi-billion dollar business.
Lyft and Uber have shown that you can improve matching logistics by bolting on games like demand charges and utilizing various supply-side nudges to direct assets to where you need them to be. These are solvable problems. It seems like you're saying you would happily use the service if there was more of it available.
You need to flood the market with scooters so that people get scooters when they want it but cities won't allow it. Plus, it's cost prohibitive. Creating a new market is NOT a solvable problem, especially at the scale of funding that they have received. You can't throw a billion dollars and expect that a new market will create itself. That's why Bird is going to die, probably by the end of 2020.
Which is a problem when the scooter companies lose money on every single scooter they put into the world.
Being popular alone is enough to grift SV investors who have money to burn, but when that well dries out they can't afford to subsidize these things to the extent required to keep them useful to people. If you can't find scooters they lose their utility, but the companies won't be able to afford leaving so much excess capacity around.
Also, the scooters have widened my options for lunch from maybe 3 choices within walking distance to something like 50. Sure it's a luxury, but for a few extra dollars, it is nice to be able to get a pita or burger instead of always a burrito.
To get that with a bike share program, bike share companies likely need to accept that their bikes get used less than once a day, on average. That means that users must pay for more than one bicycle. That, in turn, would make ownership cheaper than bikeshare programs.
Where I live the scooters are mostly in very concentrated areas that few people would use them for commuting, either because they live in the suburbs (so far away it'd be impractical) or downtown (so close that you could walk nearly as fast as a scooter ride after accounting for sitting in rush hour traffic).
And just like car rentals for regular users ownership is much cheaper. Tourism or some other niche maker surely exists, but the overhead assuming they need to break even is huge.
(I’m not saying it’s for all, but for me, the shared scooter could not be replaced by having my own, which is the argument that kicked of this subthread)
Bike shares have comparable utility with vastly lower costs, and often can’t break even.
It sounds like the problem is that it's never where you need it. Unless you had 10x as many scooters as people and they were littered literally everywhere.
As I understand it the fixed bikeshare costs are controllable and those systems are not losing money at anywhere near the rate of Bird.
EBikes will be rolling out soon for some of these systems too so that solves another one of the disadvantages they have against eScooters.
And this is in Austin. Yeah, right now I'll get sweaty, because we hit 107f heat index every other day. During the winter I can bike ten+ miles in jeans and a t-shirt without getting sweaty.
An electric scooter is a fraction of the cost of an ebike, so you can have more of them, creating a denser transport network. Not as durable, sure, but why not let the investors deal with that risk?
And as much as I'd love the US be like the Dutch and have personal bikes go everywhere, I don't bike to the coffeeshop a mile away because the only bikes I see locked up outside in my city are missing, lets say, critical pieces. Bikeshare and scootershare offload the risk of personal property theft.
That doesn’t guarantee you will have a bike available at all time (if it breaks down, you won’t get a new one in a second), but neither do bikeshare programs.
offload the risk of personal property theft
Perhaps Bird should be looking at hooking up with these sorts of businesses as ways to increase the reach of their locations, either as a co-marketing effort or using the shops as a source of revenue (e.g., sharing value for each ride to & purchase at the shop)?
GP's description just provoked me to notice a new angle
Bird is dumping these scooters in cities, and is now working with them to become the preferred provider who is allowed to do this in that city, while others aren't allowed yet. Having that head start is a significant advantage in capturing marketshare. And while a second or later mover can come along and dump their own scooters and convince people to get their app, Bird can then choose to leverage their relationships with governments and businesses and dent the progress of an upstart.
The whole point of VC funding is to build out the capital-intensive parts quickly and develop moats that make switching to later comers difficult. Discussions about how Uber has no moat come up from time to time, but ventures like Uber Eats that form a captive market are demonstrably moat-like. The real question is whether Bird can develop such a moat, or is simply laying the groundwork for some other knockoff to come along later, by which time Bird is low on cash, and all hurdles that would have impacted similar companies have been cleared by Bird.
Maybe they are holding out to become a future Uber Scooters acquisition like Jump Bikes.
One idea I would like to see is Bird rides sponsored by the business you're going to, kind of like how some businesses reimburse a parking garage ticket. It looks like Uber has started offering a program like this [1] as well.
Guadalajara has a "mibici" bike program ($20/year) where you undock a bike, get 45 minutes on it, and plug it back into a rack somewhere, else the costs mount up. Always assumed these scooter programs worked like that.
Being able to dump the scooter anywhere makes me realize why people consider them such an urban nuisance. Not really something I'd task the average person to do with forethought or courtesy unless it hits them in the wallet.
This business model was never going to work.
One cannot say that there were no previous experiences to learn from...
When it's not, it may seem like they are deluded or scammers. Maybe they are, but a more charitable interpretation is that business -- especially new businesses -- are like six blind men and an elephant, which means people can strongly disagree about the nature of the beast while both parties are simultaneously right about the pieces they know and understand and both are equally wrong in the aggregate.
You make a paper airplane. You toss it into the wind and see if it flies. No amount of debate (concerning what should fly) changes whether it did or did not actually fly.
1) compelling if it all works out. Invest clear-eyed and hope the founding team figures out the roadblocks. Greedy but not stupid; most successful startups start by 'doing things that don't scale.'
2) Pattern-matching / top-down portfolios. Mobile apps. Sharing economy. Subscription businesses. Electric Vehicles. Internet of Things. A lot of investors decide on themes for portfolio before they look at investments. Scooter sharing ticks a lot of boxes.
3) Adverse selection. It's a simple idea - anyone can grasp scooters as subscription. So the simplest-minded investors chose this rather than more subtle ideas.
4) as another comment suggested, investors are playing a game of musical chairs between funding rounds. Chamath Palihapitiya claims this as the reason his firm is stepping back from VC -- so he's walking the talk here https://www.cnbc.com/2018/10/10/start-up-economy-is-a-ponzi-...
I have come to the realization that VCs are really bad at distributing resource. For all these pedigrees to show for, they all seems to be playing musical chairs.
Part of the problem I see is that most VCs don't have a founder background and most of them you meet are pretty arrogant.
If you think of VCs as totally independent, open-minded, critically thinking professionals, dutifully providing a financial service, then no. You pick the VC for the idea rather than the idea for the VC.
The second case is the ideal, but assumes highly-competent VCs and founders with equalish leverage. I think the perverse incentives for VC partners (read Palihapitiya) and the lack-of-prestige factors for first-time founders break the model. But this seems to be more true for second-time founders with moderate success under their belt.
There's no way it's that low. Maybe 90% of VC-backed startups, and even then I think it depends on how you massage the definition of 'fail'
The informal definition we think of day-to-day is fairly fuzzy. There's nuance in differentiating a small business operated by a few people from a startup. Being venture-backed is a simple differentiator but there are still legitimate startups this would exclude, e.g., serial founders who don't need to raise or products that make money early.
With respect to "fail"... is an acquihire or an even-money, 1-3x exit etc a "failure". Probably, yes for the VC, but not necessarily for the founder. Accelerators are incentivized to count "successes" liberally as well.
With a more broad definition of startup, it's easy to see the failure rate at 99%+.
90% failure rate comes from research by Small Biz Trends
Also real estate businesses only have a 42% failure? So I have a greater than 50% chance of becoming a real estate mogul? I just don't buy it, and I don't believe those other numbers either.
And the only source they cite on the website, http://www.moyak.com/papers/business-startups-entrepreneurs...., doesn't really lend any explanation to their numbers.
I think their data is wildly skewed by sampling bias, as they claim to get their data from interviewing failed founders. Welp, they never interviewed me - how many other people have they never interviewed because they simply never knew the company existed? How many founders, after failing, go out of their way to talk about their failure?
VCs have a strong incentive to create a story that starting a company has a greater chance of success than it does, because it's low-risk for them and they want a churn of potential investment prospects.
I think 1% is a much more realistic number than 10%, unless we're limiting ourselves to Sequoia-backed post-Series A companies.
I am not joking-- I'm willing to bet that there is a direct correlation between inequality and stupid products/business models making it to market. When you can just keep trying new things until something sticks, you're not going to try very hard or act with much caution.
Bird isn’t WeWork. Yes, they’re unviable on a unit basis now. But that’s a hardware problem. They’ve grabbed market share; now they must build margins through R&D. The traditional model is R&D first market capture second, but there isn’t a fundamental reason not to go the other way when the R&D is reasonably feasible.
If I start seeing them around enough I might go to the trouble, but that requires a fair amount of density to start working.
If some new company with deep enough pockets starts promising No Unlock Fee and $0.15/min, they could quickly capture a lot of Bird, Lime, etc's market share. They'd be burning cash at an unsustainable rate, but there is no moat between these businesses at the moment.
I think it's a social engineering problem. If the scooters didn't get routinely destroyed by people 1. smashing them into curbs because it's fun or 2 tossing them in the river because they're obnoxious / blocking the sidewalk, I believe they'd be already be profitable, or at least close.
People hate the scooters. People who ride the scooters hate the scooters. Hell, I like the scooters, and I hate the scooters. :-)
I would also like to see them ticketing the riders for reckless driving/endangering of the people. I almost had an accident 2 weeks ago because some stupid riders decided to race on the street. I also see some of them riding in the sidewalks zipping through pedestrians and many times hitting their bags.
And you’ll see that most scooter riders on sidewalks are going max speed. It has made walking in cities with these things a lot more annoying, and it was already bad enough with cars but at least cars are separated from walkers.
Strong operations will allow bird to continue to cut costs.
(I'm hoping) There's still room to innovate on winterized, electric, single person products.
They mostly replace walking, which people do year-round, throughout the day, and well into the late night. At least this is true in my neighborhood.
There's almost certainly a viable business. At the end of the day, it's a question of whether the unit economics will work out. These scooters cost $1K and on average, each scooter gets ridden ten times a day with an average fare of $5. It doesn't take rocket science to see a profitable solution even with maintenance costs. The problem right now is that these companies are being extremely wasteful in order to capture market share.
FTA: ”revenue shrank sharply to only about $15 million”. That’s per quarter, so about $160,000 a day. At your claimed $50 revenue a day, that would be 3,200 scooters. Bird operates in over 100 cities worldwide (https://www.bird.co/cities/), so for that to be true, at least one of those cities would have less than 32 scooters.
⇒ it would surprise me if each scooter gets used even once a day, on average.
I know that the self driving bit is far from trivial (understatement of the decade) but at very low speed you can stop, get out of the way, phone home for some help.
Simplified scenario, and likely full of holes, but you get my idea.
If scooters keep to the road, they are perfectly fine. When they drive on sidewalks, eventually one of them will be biting my elbow.
I see scooteridiots going 15+ MPH on the sidewalk all the time.
Not sure what the collaboration/execution would be, but that's my first thought.
I get that the business model is fucked but hopefully they can design a more robust piece of hardware and also figure out the charging problem, perhaps with swappable batteries.
that makes sense. Any growth oriented company would much rather lose margins by prematurely charging than risk having an user run out of battery and churn. I don't see that changing much post-saturation.
I could imagine this flaw in unit economics being overlooked by investors and omitted in pitches. Doesn't this destroy the unit economics? Only way around it would be paying independent re-chargers per % refill rather than flat per charge? But I think I remember some firm trying that and the re-chargers would just run it down in their sheds...
Also there's apparently people out there who both charge and ride the same scooter so they get some VC funded free transportation.
1) compelling if it all works out. Invest clear-eyed and hope the founding team figures out the roadblocks.
2) Pattern-matching / top-down portfolios. Mobile apps. Sharing economy. Subscription businesses. Electric Vehicles. Internet of Things. A lot of investors decide on themes for portfolio before they look at investments. Scooter sharing ticks a lot of boxes.
3) Adverse selection. It's a simple idea - anyone can grasp scooters as subscription. So the simplest-minded investors chose this rather than more subtle ideas.
4) as another comment suggested, investors are playing a game of musical chairs between funding rounds. Chamath Palihapitiya claims this as the reason his firm is stepping back from VC -- so he's walking the talk here https://www.cnbc.com/2018/10/10/start-up-economy-is-a-ponzi-...
How many products can you say that about?
There are only a few things nearly everyone wants: food, housing, transportation, utilities, sex, clothing, medical care, hair cuts, google search.
Nearly all of those require constant in person staff and/or have a ton of regulations. The exception here is Google, which is why they are killing it. Google search-and software in general-makes money while people sleep and doesn't require linear addition of staff to scale.
Other stuff that people buy: e.g. video games, movies, trinkets, rock climbing gym memberships come down to people's personal taste and they might even want some variety (e.g. making a sequel). Everyone wants transportation though and they're OK with the same thing every day, as long as it works.
This is a case where they are taking something with absurd demand and looking for the profit second.
That seems like a highly misleading comparison. They're comparing Uber/Lyft contractors with Bird customers here.
> Bird’s largest cost per ride is depreciation, or the decline in value of its scooters. Depreciation, as calculated by the company, is a four-week trailing figure taking the total depreciation expense for that time and dividing it by the total number of rides, a person familiar with the matter said. Currently, that figure ranges from $0.94 to $1.17 per ride, or about a quarter of revenue for each ride, Bird says. ...
These numbers appear to apply to Bird Zero and Bird One, not the older scooters which presumably have even higher depreciations.
The article doesn't appear to break this down further, but it seems a big part of depreciation might be loss/theft/vandalism. That's unlikely to decline because better quality scooters are put into service. If anything, it seems the move to more robust (and expensive) platforms might make the scooters even more attractive to thieves.
The company is projecting solid growth in the summer months, when it expects to break even, excluding capital expenditures.
I tried one of the scooters when they first hit the streets here and it promptly gave up the second I tried going up even a moderate hill. So I guess they’re great if you happen to need to go on a totally non-hilly route in one of the hilliest metro areas on earth?
I am, btw, otherwise a massive alternative-transportation fan. The e-assist bikes (Uber/Jump in particular) are life-changing. Enough of an electric kick to keep you from breaking a sweat, but you’re still moving your body and getting some cardio (even if a small amount), and if you need to go over a hill (likely), you can put a bit of muscle into it and actually make it to the top.
I'm not saying they're a great fit for everyone -- but there's definitely a market.
Obviously the $70k in scooters they're losing here won't break them, but scooters are now legal in Richmond, so one would assume Bird could just pay their fines and get them back now. My guess is they already wrote them off last year so they just don't care, but it's not a good look for them.
[1] https://richmondbizsense.com/2019/07/11/flipping-birds-flock...
I’m sure Bird will have equally good spin as to why, despite claiming this is such an egregious abuse of journalistic ethics, they won’t sue. “Priorities” or some such lazy excuse I’m sure.
I see more electric scooters in the bicycle lanes by the boardwalk than bicycles, by a factor of 2x or 3x.
I'm not sure the Bird model will work everywhere, but in "beach towns" or college campuses, etc, it's a good model. It's probably overvalued, but the concept of a "ride share dockless scooter" isn't always bad in some places.
I can't see how ubiquitous scooters is anything but a niche business.
Selling scooters to those that want them does make sense as a business. But I doubt that helps Bird because that's still probably not a very big business. I'd think it would take something on the order of decades to make $300M selling scooters.
You offer the item for free or heavily subsidized, and make money off of late fees. In this case, rides are freeish but if you don't return it on time you pay an arm and leg?
Someone has to have tried this, right?
Bird does a good job with the second, but seems to neglect the auto service locations. They seem to park their scooters next to the bus stops, which, if this were San Francisco, might make sense, but here, only poor people ride the bus and they’re unlikely to pay for a scooter. Now, they could offer geofenced price reductions for rides originating around these bus stops and increase utilization, but their current pricing prevents the poor from using the service.
You're literally advocating drunk driving. Whether or not you're driving a car or a scooter, this is dangerous, illegal, and you should never do it. You're endangering yourself and others.
And just in case you didn't know, in California the penalties for driving a scooter drunk are exactly the same as a car. The law makes no distinction between driving a car, driving a scooter, or riding a bike. If you are in control of a vehicle and drunk, you are committing a DUI.
However, a great start for eliminating the auto as the primary city transportation.
Electric Scooters drops from the sky. Now what?
It's nice that sites out there are thinking "we should do something nice for Hacker News as a way to build buzz."
But kinda defeats the purpose when they didn't actually do what they said they did.
Would you mind reviewing the site guidelines? Note that they include "Be kind."